FATF Status

India is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in India was undertaken in 2024. According to the follow-up Evaluation, India was deemed Compliant for 11 and Largely Compliant for 26 of the FATF 40 Recommendations. It was assessed Highly effective for 0 and Substantially Effective 6 of the Effectiveness ratings.

India's G20 Anti-Corruption Ministerial Meeting in August 2023 highlighted ongoing corruption issues that hinder foreign direct investment (FDI), with American businesses citing both actual and potential corruption as significant barriers. The country scored 39 on Transparency International’s Corruption Perception Index, ranking 93rd out of 180 countries, and despite existing laws aimed at combating corruption, such as the Prevention of Corruption Act, enforcement remains weak, allowing bribery and red tape to flourish, particularly in the judiciary and public services.

India is the world's fifth largest economy with a GDP of $3.4 trillion, experiencing close to seven percent growth in 2023. The country is expected to maintain a growth rate of six to seven percent in the coming years, driven by favorable demographics and rapid industrialization, with aspirations to become a developed nation by 2047. However, achieving these economic goals will depend on sound macroeconomic policies and addressing challenges such as high tariffs and energy security.

India's investment climate has improved due to recent structural economic reforms aimed at enhancing the business environment for foreign investors, including liberalizing foreign investment restrictions and modernizing bankruptcy laws. However, protectionist measures, such as high tariffs and localization requirements, continue to pose challenges for foreign firms seeking to enter the Indian market. The government actively promotes foreign direct investment (FDI) through various initiatives and regulatory frameworks, while also maintaining certain restrictions in sensitive sectors.